Special Revenue Fund

DEFINITION of 'Special Revenue Fund'

An account established by a government to collect money that must be used for a specific project. Special revenue funds provide an extra level of accountability and transparency to taxpayers that their tax dollars will go toward an intended purpose. Governments must rely on operating and capital budgets to pay for their other expenses.

BREAKING DOWN 'Special Revenue Fund'

For example, a city might establish a special revenue fund to pay expenses associated with storm water management. The money in this fund could only be used for storm water management costs, such as street sweeping, drain and ditch cleaning, system maintenance and public education. The city would be required to publicly report on where it collected the special revenue fund money from and how it spent the special revenue fund's budget.